How to Be Economically Independent

by Lisa McQuerrey
Learn to budget your money wisely.

Developing sound financial habits as a young adult can lead to economic independence and smart budgeting knowledge that can help you throughout the course of your life. Becoming economically independent requires self-restraint, responsibility and a dedicated work ethic. It’s a process that evolves over time.

Find employment that's in line with your area of interest or expertise or that fits with your academic schedule. Look for a position that you’ll enjoy and that offers opportunities for growth and development. The more you like your job and the more potential for advancement the position holds, the more likely you are to stay with it and build your economic independence.

Make a list of your expenditures and compare it to your income. If the figures don't add up, eliminate some of your non-necessary expenses, increase your income, or use a combination of the two.

Set aside a portion of all income and put it into a savings account. This establishes good savings habits and gives you a cushion to fall back on in the event you lose your job or experience a financial emergency.

Live within your means. Initially, this might mean going without extras. For example, it's necessary to pay your rent; it's not necessary to automatically upgrade to the latest new cell phone that hits the market. Keep yourself in check when it comes to recognizing wants versus needs.

Borrow carefully and learn to use credit wisely. Applying for and using credit cards is a fact of everyday life, but don't consider credit a form of income; it's a tool for effectively utilizing your actual paycheck. Pick cards with low interest rates and use them to handle online financial transactions or in the event of an emergency. Always pay on time, and don't over extend yourself or take on more than you can reasonably repay.

Stop accepting money from your parents. While teens and young adults commonly rely on some amount of parental support, meaningful economic independence means fully supporting yourself. Make a plan for transferring key expenses your parents have been paying on your behalf, such as tuition, car insurance and health insurance, into your own name.

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